How Long Will My Refund Take?
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For many people, the highlight of tax season is receiving a refund from the IRS for the amount of income taxes they overpaid the previous year. If you’re anticipating receiving a refund for overpayment of income taxes, then you might be wondering how long it takes to receive a tax refund?
Electronic filing of income tax returns has sped up the refund process considerably for those who choose to e-file. Before e-filing was available, tax returns had to be mailed to the IRS where the information was scanned or manually entered into the system. Then the IRS issued paper checks that had to be mailed to taxpayers. This manual process could take up to two months, keeping many people anxiously waiting by their mailboxes for weeks.
Instead of mailing your tax return to the IRS, you can now e-file your return and receive your refund much faster. When you e-file, you can also elect to receive your refund via direct deposit to your bank account, thus eliminating mail delays in the receipt of your refund.
According to the IRS, refunds can be issued to taxpayers by direct deposit as soon as eight days after tax returns are filed. Meanwhile, nine out of 10 taxpayers choosing direct deposit receive their refunds within 21 days of the date they file electronically. Keep in mind that it may take an extra few days for your bank to make funds available to you after the refund is issued electronically.
What If I Don’t File Electronically?
You can still file your income taxes the old-fashioned way by mailing in your return and receiving a paper check if you prefer. However, you won’t receive your tax refund nearly as quickly.
According to the IRS, taxpayers who mail in their returns but choose direct deposit of their refund will generally receive their refund in about three weeks. Those who e-file their returns but choose to receive a paper check in the mail will generally receive their refunds in about one month. And those who mail in their returns and choose to receive a paper check in the mail will generally receive their refunds in about two months.
What If I Claim the EITC or the ACTC?
Keep in mind that if you claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) this year, your income tax refund will likely be delayed beyond these dates. Last year, Congress passed a law requiring the IRS to hold the refunds of all tax returns claiming these credits until February 15, 2020, regardless of when the returns were filed. The goal is to reduce fraud that sometimes occurs on returns claiming these credits.
According to the IRS, taxpayers who claim these credits this year won’t receive their refunds until the week of February 24 at the earliest if their returns are filed electronically and they choose direct deposit. Taxpayers who mail returns and choose to receive a paper check will receive refunds even later than this.
How Can I Check the Status of My Refund?
You can check on the status of your tax refund after you file your tax return by visiting the Refund Status page on the IRS website. You’ll need to know your Social Security number, filing status and dollar amount of your refund in order to get a status update. You can use this page about 24 hours after filing your tax return electronically or a month after mailing in a paper tax return.
Be sure to speak with a tax advisor if you have more detailed questions about your tax return.
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The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.
